In Maryland 24 Tax Hikes Is Not Enough

You have got to love those statists. It does not matter what reality throws at them – they just never give up.

Take Martin O’Malley, for example. This guy has been the governor of Maryland since 2007. During that time he has raised taxes 24 times. Yet for some reason he still can’t find enough money to pay for all his spending. For some pesky reason his tax base keeps moving out of state: in the 2009 Census Bureau state-to-state migration study, four of the top five states to which Maryland suffered the biggest net loss of residents had lower taxes than Maryland. Pennsylvania (second largest net loss) has a low, flat income tax and Virginia has a flat rate, one percentage point below Maryland, above $17,000.

So both the rich, the high-income earners, the shoppers and the jobs all refuse to stay in Maryland. But instead of considering the possibility that it might be a bad idea to raise a tax every ten weeks for five years, Governor O’Malley forges ahead with yet another tax grab. This time, though, he wants to make sure the tax base does not leave the state.

What better constituency to target then than addicts?

The neat thing (from a liberal viewpoint) about addiction taxes is that the people you tax are far less inclined to move. Governor Martin O’Malley knows this. But just to be on the safe side, this time Governor O’Malley is including some perks for those members of his new tax base that stay where they are and don’t move. The Baltimore Sun reports:

Gov. Martin O’Malley unveiled legislation Tuesday night that would expand gambling in Maryland, limit the influence of gambling interests in state politics and extend tax breaks to casino operators who would face increased competition if the plan is approved. The legislation would allow a sixth casino in Maryland, to be located in Prince George’s County, and authorize table games such as blackjack and poker at all of the state’s gambling sites. The bill would also allow all of the state’s casinos to operate 24 hours a day, seven days a week. … Maryland’s General Assembly is set to return to Annapolis for a short special session to debate the bill, beginning Thursday. Should the legislation pass, voters would still have to ratify major portions of it during the November election.

The entire reason for this expansion of gambling is of course to allow the state to rake in more taxes as gambling addicts waste away their paychecks, savings and pensions. But as we know from the state’s move to raise the beer tax a year ago, a statist like Governor O’Malley has no moral problems funding his big state government on the backs of addicted citizens.

The Baltimore Sun continues, revealing how anxious the governor is to not drive his beloved tax base out of state:

The 55-page legislation could be heavily amended during the special session, which is expected to be a whirlwind event that’s heavily lobbied. Sticking points between the legislature’s two chambers have stalled past gambling proposals. House Speaker Michael E. Busch, who had been cool to expanding gambling in years past, put out a statement Tuesday saying that the governor’s bill “reflects our principles.” “The work of the House is not done,” Busch said. “We will continue to provide input throughout the special session in order to put the best product possible before the voters in November.” Sen. Rich Madaleno, a Montgomery County Democrat who has taken a leading role on the issue, called the bill a “fair proposal” that is “very much” like the bill the Senate passed earlier this year and also tracks a proposal from a work group convened by the governor to study the issue this June. “It balances our opportunity to increase revenues with safeguards for the current license holders,” Madaleno said.

Here is where it gets really interesting:

The state’s fledgling gambling program is still getting off the ground. Only three of the five casinos authorized in 2007 have opened. One in Cecil County, Hollywood Casino Perryville, has asked to return up to 500 slot machines to the state after business fell off following the opening in June of the Maryland Live Casino at Arundel Mills. A planned casino at the Rocky Gap resort in Western Maryland has also scaled back the size of its gambling floor.

The free market speaks, telling both casino companies and the governor – who won’t listen – that there aren’t enough gambling addicts in Maryland to sustain all the casinos that the governor wants tax revenues from:

It was still unclear Tuesday exactly how much new revenue the proposed gambling expansion would generate for the state. [The governor's legislative director] Bryce said that when fully implemented, the changes would bring in an additional $200 million. But for next year’s budget, the revenue figure is closer to $60 million.

Apparently, someone has told the governor that there is not enough of a market for casinos in Maryland, regardless of how much the governor craves more gambling addicts to tax. So what does the governor do?

The bill would reduce the effective tax rate for the state’s two largest casinos from 67 percent to 56 percent — though strings would be attached. The Maryland Live casino in Anne Arundel County and the planned casino in Baltimore to be run by Caesars Entertainment Corp. would have to use about half of the tax savings for capital investments and marketing. Those two facilities would also have to buy their own slot machines under the bill. The state currently owns or leases the slot machines used by casinos. Administration officials stressed Tuesday that the state will achieve significant savings by partially unloading the responsibility of buying slot machines.

In other words, the governor admits that tax cuts are good for businesses. He gives them to businesses that are about to get more competition in a tight market – not because other entrepreneurs think there is money to be made in that tight market, but because the Governor of Maryland is warping economic reality in his desperate hunt for more tax revenues. The small tax break obviously is insignificant compared to what the governor thinks he can rake in from a new casino.

With emphasis, of course on “thinks”. Given O’Malley’s record as a tax hiker, and given the fact that his state is still struggling with its budget, it is a safe bet that his new gambling tax initiative will be equally unsuccessful.

The only question that remains is: who will O’Malley go after next?